Does Shariah-compliant investment involve more risk than conventional investment?

With any type of investment, risk is determined by several factors. Shariah and conventional investments need to be evaluated using the same risk management techniques such as analysing the business plan and commercial viability of the project, the track record of the issuer or project owner, and industry risks and macro-economic factors. For investments to be qualified as Shariah-compliant however, there is an extra level of analysis that must be carried out to ensure the businesses that are seeking funding adhere to the principles of Shariah.

Last Update: 04 October 2024